Skip to main content

The Globe and Mail

Rosenberg: This is no time for market complacency

Getty Images/iStockphoto

Globe editors have posted this research report with permission of  Gluskin Sheff + Associates Inc. This should not be construed as an endorsement of the report's recommendations. For more on The Globe's disclaimers please read here. The following text is excerpted from the report:

The Fed's balance sheet, while no longer doing anything for the economy, is seriously distorting important price signals and the incentive system, not to mention letting the government believe that it has a free lunch on fiscal policy now that the Fed is bailing it out by underwriting still-massive deficits, even in an economy that is growing, albeit moderately.

All one needs to do is see what is happening now in wide swaths of the credit markets and then dust off that Jeremy Stein piece on credit bubbles from last February. Meanwhile, the Fed has been successful at making it appear as if there is prosperity, but it is fake — illusory … in Potemkin fashion. And the chart of the balance sheet-adjusted NYSE attests to that.

Story continues below advertisement

Meanwhile, the P/E ratio for the Dow is pressing against three-year highs and stands a full two points above the near-term average. Margin debt has exploded 32 per cent in the past year to stand where it did near the peak of the last cycle. And sentiment at 64 per cent is also near where it was at the peaks of the last cycle.

This is only to suggest one thing — this is no time for complacency!

Read the full report here.

Report an error
About the Author
David Rosenberg

David Rosenberg is chief economist and strategist for Gluskin Sheff + Associates Inc. and author of the daily economic newsletter Breakfast with Dave. More


The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at